ULTIMATUMS IN 2-PERSON BARGAINING WITH ONE-SIDED UNCERTAINTY - DEMANDGAMES

The demand game is a noncooperative two-person ultimatum game with one -sided uncertainty in which the Sender knows the value of the shared s urplus (pie) but the Receiver only knows its probability distribution (Mitzkewitz and Nagel, 1993). We study experimentally the effects of s ystematic changes in the variability of the pie distribution on the Se nder's proposals and Receiver's (binary) responses. In accordance with a behavioral theory that we propose, we find that (i) the Sender's pr oportional share of the pie increases as the Receiver's uncertainty ab out the pie increases, and (ii) for a given pie distribution, the Send er's proportional share decreases as the actual pie size increases.